It is debatable which of
these two main economies is a more logic and effective one to apply on a modern
society, having both their unique advantages and disadvantages.
A planned economy is an
economic system, used by one third of the world during the 1980’s, in which the
government makes all of the main decisions regarding resources, employment and
capital income in the “best interest” of the people to maintain a stable
economic development and for equality in social aspects. This economy is
frequently associated to communism for the way it functions and the amount of
participation from the government in general matters. Resources are owned by
the state and the government dictates the levels of production as well as the
prices and wages of it. This central planning aims to increase the rates of
productivity by consolidating economic resources when planning for investment
and other actions. However, many argue if it is efficient for one entity
to have such power over something as massive as a national economy, and debate
about how having a constant, regular payment for people promotes inefficiency
and laziness.
On the other hand, we have
the free market economies in which the economic problematic is handled by
private enterprises and all resources are privately owned. Here, the companies
base their actions on the concept of “demand and supply” to organize the
levels, prices and wages of production and satisfy the necessary requirements
while creating a formidable income from it, creating different status jobs and
giving people the opportunity to escalate in a successful career. This is a
more individual, independent way for companies and brands to handle their
products and profits, having to design strategies adequate for their particular
needs and characteristics. There is, as explained, no government intervention
in these and they conquer success by adapting to the demand changes in each
particular scenario. This is a fairly popular strategy around the world,
because it allows for flexibility and diversity of plans for the development of
the industry.
The controversial question
of “Which is better?” is almost impossible to answer in a general context since
every nation needs different, unique needs to satisfy and divergent strategies
to satisfy them with. However, if it were imperative for me to decide, I would
probably opt for the “mixed economies” system to provide just the necessary
push for companies and industries to rise. This economies I believe allow for a
very independent development of ideas and actions, but has the government’s
involvement as a backup and pillar in case of any complications with the
processes or difficulties in handling the possible abrupt changes and
fluctuations in national requirements or needs.
By: Ana Gabriela Gonzalez
Ana, you did a really good job, i like how you structure your paragrapghs and ideas, it makes it clear to understand what you want to say.
ReplyDeleteYou explain well both planned economies and free market, telling its history, its ideas, the causes and effect in good and bad ways, which makes the reader have more knowledge about the topic.
About your conclusion I say that it is excelent, you give your own point of view and the goverment point of view.
Good work :)